This guide is maintained as a current resource for July 2026 and covers only the laws of England and Wales. Information is for general guidance, not legal advice. Consult a qualified solicitor for advice specific to your situation.
Learn how employment tribunals in England and Wales decide unfair dismissal cases, including the legal tests under the Employment Rights Act 1996, how tribunals assess reasonableness, procedural fairness, evidence and remedies available after a successful claim.
When an employee in England and Wales believes they have been unfairly dismissed, they can bring a claim before an employment tribunal. Tribunals are specialist judicial bodies that assess whether the employer's decision to dismiss was lawful and fair. Understanding how tribunals evaluate unfair dismissal cases is essential for employees considering a claim and for employers managing dismissal processes. This article explains step by step how employment tribunals decide these cases, including the legal tests, evidence considered, procedural and substantive fairness, and practical examples.
What an Unfair Dismissal Claim Involves
An unfair dismissal claim arises where an employee contends that their dismissal was not justified in law. To succeed, a claimant must typically show:
- They were an employee at the time of dismissal.
- They were dismissed (contract terminated by the employer or treated as such through constructive dismissal).
- They have qualifying service (usually two years' continuous employment for ordinary unfair dismissal claims).
- The dismissal was unfair according to legal criteria.
Before a tribunal claim can be issued, most employees must first notify Acas and participate in Early Conciliation.
Statutory Framework: Employment Rights Act 1996
The law governing unfair dismissal in employment tribunals is primarily found in section 98 of the Employment Rights Act 1996. Under this section, a tribunal follows a two‑stage test:
- Is there a potentially fair reason for dismissal?
- Did the employer act fairly in dismissing the employee for that reason?
A dismissal cannot be fair if either question is answered negatively.
Stage One: Fair Reason for Dismissal
The first question the tribunal considers is whether the employer's stated reason falls within one of the five potentially fair statutory categories:
- Conduct such as misconduct or gross misconduct.
- Capability or qualifications, including performance or ill‑health.
- Redundancy or genuine business needs.
- Statutory restriction where employment would breach the law.
- Some other substantial reason (SOSR) such as business reorganisation.
If the employer cannot show that the reason falls into one of these categories, the dismissal is automatically unfair.
Stage Two: Was the Dismissal Fair in All the Circumstances?
If the reason is potentially fair, the tribunal proceeds to decide whether the dismissal itself was fair in all the circumstances. This involves two key strands:
- Substantive fairness – whether the decision to dismiss fell within the band of reasonable responses open to a reasonable employer.
- Procedural fairness – whether the employer followed a fair process before dismissing.
Substantive Fairness and the Band of Reasonable Responses
Tribunals do not simply substitute their own judgment for that of the employer. Instead, they apply the “band of reasonable responses” test. This objective test asks whether the employer's decision to dismiss was one that fell within a range of responses that a reasonable employer might have adopted in the circumstances.
Important points include:
- The tribunal considers what the employer knew at the time of the decision.
- It recognises that reasonable employers may differ in their responses.
- The size and resources of the employer's business can be relevant.
A dismissal is likely unfair if no reasonable employer, acting reasonably, would have made the same decision on the facts.
Procedural Fairness
A fair decision must be reached fairly. A tribunal will examine whether the employer followed an appropriate process, taking into account:
- Whether there was an investigation into the issues leading to dismissal.
- Whether the employee was informed of the allegations or concerns in writing.
- Whether the employee was given a reasonable opportunity to respond.
- Whether the employer followed its own disciplinary and grievance procedures.
- Whether disciplinary processes complied with the Acas Code of Practice on Disciplinary and Grievance Procedures, where applicable.
Failing to follow a fair procedure can lead to a finding of unfair dismissal, even if the reason for dismissal was potentially valid. A tribunal may also adjust compensation by up to 25% if parties unreasonably fail to follow the Acas Code.
Evidence and Tribunal Assessment
Tribunals consider evidence presented by both sides, including:
- Written documents (contracts, dismissal letters, disciplinary records).
- Witness testimony from the claimant and employer representatives.
- Notes of meetings, emails and other contemporaneous records.
The tribunal weighs this evidence on the balance of probabilities - that is, whether it is more likely than not that certain events occurred as claimed.
The tribunal's list of issues typically frames questions around whether the employer had a fair reason, carried out a proper investigation and took a reasonable and proportionate course of action.
Mitigating and Aggravating Factors
Tribunals may consider contextual factors that could influence the fairness assessment, such as:
- Length of employee service and disciplinary history.
- The seriousness of alleged misconduct.
- The employer's consistency in dealing with similar cases.
- Whether less severe sanctions were considered before dismissal.
These factors help the tribunal determine whether dismissal was a proportionate response.
Remedies if the Tribunal Finds Unfair Dismissal
If a tribunal decides the dismissal was unfair, it can order remedies such as:
- Reinstatement (returning the employee to their job).
- Re‑engagement (employment with the same employer on new terms).
- Compensation, including a basic award and a compensatory award for loss of earnings.
The amount of compensation may also be increased if the employer failed to follow the Acas Code or decreased if the employee failed to comply.
Practical Example
Imagine an employee dismissed for alleged misconduct. The employer must show it genuinely believed the misconduct occurred, had reasonable grounds to believe this and had conducted a reasonable investigation before dismissal. If the disciplinary investigation was cursory or biased, a tribunal may find the dismissal unfair even if misconduct was alleged.
Time Limits and Procedure
Most unfair dismissal claims must be filed within three months minus one day from the effective date of termination. Early Conciliation through Acas must be attempted before issuing a tribunal claim.
Key Takeaways
Employment tribunals decide unfair dismissal cases by applying the legal tests in the Employment Rights Act 1996. They first assess whether the employer had a potentially fair reason for dismissal. If so, tribunals then examine whether the dismissal was fair in all the circumstances by applying the band of reasonable responses test and reviewing procedural fairness. Evidence is weighed on the balance of probabilities, and tribunals consider both procedural and substantive elements. Understanding these principles helps employees and employers anticipate how tribunals approach unfair dismissal claims and the factors that influence outcome and remedies.
